Many people use the term bookkeeping and accounting interchangeably. While both roles contribute to the financial success of a company, they perform different tasks and there are some significant contrasts in their experience and educational requirements.
While Bookkeepers are not required to have a specialized degree to practice their profession, Accountants must have a bachelor’s degree and hold a Chartered Professional Accountant (CPA) designation.
Bookkeeping is more tactical and administrative with a daily focus on recording and tracking financial transactions. Bookkeepers must be highly skilled at keeping track of data, with a keen eye for accuracy. In contrast, Accountants are more strategic and analytic, and work closely with management to make decisions about the financial direction of the business.
Bookkeeping consists of:
- Recording financial transactions
- Posting debits and credits
- Producing invoices
- Completing payroll
- Maintaining and balancing general ledgers and accounts
Accounting consists of:
- Preparing company financial statements
- Analyzing costs of operations
- Completing income tax returns
- Helping and advising management on the impact of financial decisions
Bookkeeping and accounting services are often provided by different individuals in an organization. Although different, they are both important roles for ensuring the smooth management of a company’s financial landscape.
Organized financial records and carefully recorded transactions are essential for maintaining accuracy of financial statements. It is the foundation of a larger financial picture of the company and provides essential support for strategic accounting. The role of an Accountant is to have a clear vision and strategy for the company’s long-term financial success.